SERVICE MERCHANDISE ISSUES FIRST OF THREE HOLIDAY SALES UPDATES
NASHVILLE, Tenn.--(BUSINESS WIRE)--Dec. 2, 1998--Service Merchandise Company, Inc. (NYSE: SME) today issued the first of three holiday sales updates that it will make in December. The Company also announced that the second and third updates will be issued on December 16 and December 30, respectively.
The update presented in this release covers the period from September 28, 1998 to November 29, 1998, which includes the weekend following Thanksgiving. Historically, Service Merchandise does approximately 65% of its fourth quarter sales during the month of December, a substantial portion of which occurs during the two weeks leading up to Christmas. Therefore, while early holiday trends are important, the trendline and actual results for the quarter can be impacted dramatically by sales activity immediately before Christmas.
For the period from September 28 to November 29, which represents the Company's fourth-quarter-to-date reporting period, comp store sales were down on a percentage basis in the low teens. Jewelry comp sales were up in the high-single-digit range while hardline comp sales were down in the high-teens range. "While I am disappointed that overall hardline comps were down significantly, I am pleased that certain home categories reflected positive sales results, and that jewelry comp sales were positive," said Gary Witkin, President and CEO.
Overall, the gross margin rate was up as margin rates increased in hardlines and as the sales mix included a higher percentage of jewelry. Gross margin dollars were down on an absolute basis in the mid-single-digit percentage range due to lower overall sales.
As of November 29, the Company's borrowings under its revolving credit facility were $298 million with excess capacity in the facility of $270 million. At the end of November, overall inventory levels were in-line with the Company's plan.
Service Merchandise fine jewelry, gift and home stores offer dominant selections of name brand products and value pricing. The Brentwood, Tenn.-based company employs approximately 25,000 associates and operates 359 stores in 34 states. |
